Real Estate

The Carmel Market is one of Tel Aviv’s most famous landmarks and tourist destinations, and will soon see a new and improved version of itself gracing the city’s main street. This week the Tel Aviv municipality announced its full renovation with an additional 320 apartments to be built on the surrounding streets.

Despite Tel Aviv having been founded in 1909 and merging with neighboring Jaffa in 1948, the city has never formulated an urban masterplan, that is, until today. Last month saw Tel Aviv-Jaffa mayor Ron Huldai sign the TA-5000 plan, creating a unified vision for the city thru 2025.

Private homes in Tel Aviv’s central neighborhoods are extremely hard to come by, with less than 30 still remaining. Investors and homebuyers have for many years sought in vain to get their hands on the precious few than come onto the market, to no avail. Israel’s prominent business journal, Globes, reported this week

It’s no new news story that real estate prices in Israel are continuing to rise, and yesterday the government confirmed the hype. Prices throughout the country have risen 5% from the corresponding period last year, and 0.9% from Q4 2012. The greatest increases were seen in Tel Aviv, where prices jumped 11% from last year, and 2% from Q4 2012.

As both a new comer or a veteran to the Tel Aviv real estate market, you may have found yourself asking yourself this very question. In a market where the newest and most modern apartments fetch the highest prices, way above market value, many home buyers and investors find themselves willing to wait the 2 to 3 years that many new projects require until you’re able to call your new home, “home”. Just as many, of course, find it difficult to justify the wait time, for both practical and market reasons.

It’s been a crazy summer here in the Tel Aviv real estate market. Our small city has been the center of the social protests that are occurring throughout Israel, with hundreds of thousands of people both marching in, and living on, the streets, protesting the high costs of housing and the overall cost of living. To make things more complicated for the Israeli housing market, journalists, economists, academics, developers, brokers, bankers, and bureaucrats alike continue to conjecture about the “bubble burst” that no one seems to understand, when, or even if, it exists.

Anyone following the Israeli housing market over the past month has heard the hype. “The Israeli real estate market is a bubble!“, they cry, “people are camping in the streets, prices will surely fall next week!”, they write on their blogs and op-eds. Yet you have others who will tell you that the market is intact, prices won’t fall, and that, in fact, they will continue to rise.

Over the past month, the Israeli business press has been flooded with numerous articles and interviews concerning the state of the Israeli housing market. After seeing a steady increase in housing prices since 2007, at an average rate of 12% a year, prices rose over 15% in the last year, prompting many in the press and public to claim a bubble, due to these numbers being out of the norm for a developed country.